Japan's ambassador to London says Brexit is a high stakes issue and warns that Japanese companies will not be able to stay in Britain if trade obstacles after Brexit made them unprofitable.

"If there is no profitability of continuing operations in the UK - not Japanese only - then no private company can continue operations," Koji Tsuruoka told reporters on Downing Street on Thursday after a meeting between British Prime Minister Theresa May and 19 top Japanese bosses, including Nissan, SoftBank and bank Nomura.

"So it is as simple as that. This is all high stakes that all of us, I think, need to keep in mind," he added.

Japanese companies have spent some 56 million dollars (40 billion pounds) in Britain since the late British Prime Minister Margaret Thatcher had promised them a business-friendly base from which to trade across the continent.

Japan, the world's third largest economy, has voiced strong public concerns about the consequences of Brexit on Britain, the second-most important destination for Japanese investment after the United States.

Japan and the European Union in July 2017 forged a major free trade deal to create the world’s largest open economic zone, rebuking “protectionist” trade policies adopted by the US and the UK.

Expected to go into effect in early 2019, the deal will cover nearly 30 percent of the global economy, 10 percent of the world's population and 40 percent of global trade.

During the Thursday meeting, the British premier told the Japanese business leaders that Brexit would allow London to sign a free trade agreement with Tokyo.

May emphasized that the government's industrial strategy made Britain "more attractive."

She said Brexit was "no small undertaking" and added, "Just today we have seen the Bank of England raise its forecast for UK growth compared with its estimates three months ago."

Following the shock 2016 Brexit vote, Japan issued a warning expressing concern over a cliff edge that could disrupt trade when Britain formally leaves the EU in March 2019.

Nissan, Toyota and Honda started their operations in Britain in the 1980s and now manufacture nearly half of all of Britain's 1.67 million cars. The big majority of these are exported.

British Business Minister Greg Clark said Wednesday that the government does not know how the UK’s trade arrangements with the EU will look like in the post-Brexit era.

In an interview with the BBC, Clark said he could not offer any details of the end-state Britain was seeking while the two sides were still negotiating.

European Union authorities also on Wednesday defended as necessary and justified a series of potential punishments against Britain during the time it leaves the continental bloc.

An advisor to the EU’s top negotiator, Michel Barnier, said a plan to have sanctions by EU members on Britain during the so-called post-Brexit transition period would be necessary to prevent London from breaching its agreements.